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The New Brunswick government must address the "very serious concerns" over the development of the shale gas industry, but should not impose a moratorium on the industry, according to a new report.

Louis LaPierre released his report on the development of the shale gas industry on Monday. (CBC)

The provincial government hired Louis LaPierre, a professor emeritus in biology at the University of Moncton, to solicit the opinions of citizens over 116 proposed regulatory changes to the oil and gas industry.

His recommendations are based on feedback from the nine public meetings held across the province earlier this year.

Opponents to the shale gas industry often came out in large numbers to LaPierre's meetings to express their concerns.

"Throughout this process I became acutely aware of the very serious concerns that New Brunswickers have regarding shale gas exploration, as well as the economic benefits that the industry could have for our province," LaPierre said in a statement.

"I began to think of a way that the two sides of the shale gas debate could co-exist and created the Path Forward, which is a framework and a set of actions that would allow the province to fully explore the potential of a shale gas industry in New Brunswick."

LaPierre's report contains 14 recommendations.

In his report, he rejects the idea of a provincial moratorium on the shale gas industry, saying that would stop all research and "would not benefit New Brunswick or its people."

"While there is a belief that New Brunswick does possess large-scale shale gas deposits, the potential still needs to be calibrated through more exploration and testing," LaPierre said in his report.

'I can't imagine that the health officer would not highlight the dangers and the real hazards associated with shale gas mining on the health of our people.'—Marilyn Lerch, The Alliance

"A moratorium will only serve to delay that important study and postpone making a determination if there is a business case for shale gas extraction, how it can be done on an environmentally sound basis, and how proposed regulations can be implemented to have the desired effect."

LaPierre says the provincial government should choose two or three sites for hydro-fracking research and development, where regulations could be tested for their effectiveness.

All other drilling should stop, but mapping, including seismic exploration should continue, he said.

The report makes a series of recommendations, including:

A water use strategy.

A chemical database and health registry that would be available to doctors.

Tough regulations.

Funds for citizens in situations where problems arise.

The report also calls for a heritage pool to be created, so that some of the gas found in New Brunswick would remain for use in the province.

LaPierre noted in his report that there was an "active group" in the province that opposed the shale gas industry.

He said they fear for their safety and the environment and are also worried about government integrity.

"People talked to us and indicated that they did not have faith in government doing what they say they will do, or in the information they provide."

But LaPierre said that's no reason to shut down the industry.

Citizens should think about potential royalties, jobs and a resource that could drive economic development, he said.

"Currently, people have told us, gas is too cheap, let's leave it in the ground. Well, cheap gas may not be a bad thing for New Brunswickers."

LaPierre also said some of "the facts and figures that were referenced in the public meetings were difficult to substantiate."

But the university professor did not confine his observations about the public meetings to those who showed up at the forums. He used his report to point out the absence of presentations from the province's business leaders.

"I was surprised that various business chambers, boards of trade and municipalities did not choose to make a formal position or recommendation through the consultation process," the report said.

"I personally find it concerning that organizations such as these chose to remain silent on an issue that could have a profound impact on New Brunswick’s economy."

New Brunswick is not the only province dealing with a shale gas controversy.

Last month, Bouchard questioned statements by Quebec's new natural resources minister on the shale gas industry.

New oversight mechanism needed

The LaPierre report also called for the New Brunswick government to revamp its oversight structure for the shale gas industry.

The report criticized the province's decision to create an internal natural gas group consisting of civil servants from different departments as not "adequate to deal with the long-term implications of developing an industry."

He said a new governance model should be created before any exploration starts in 2013.

LaPierre said the oversight power should be handed over to the Department of Energy and Mines "as soon as possible."

"It is first and foremost an energy option that should be managed in our provincial government structure where the accountability for energy policy resides," the report said.

Dr. Eilish Cleary, New Brunswick's chief medical officer of health, has said she believes it's important for public health to be considered at every step of shale gas development. (CBC)

The report says the Energy and Utilities Board, the province's energy regulator, would oversee issues surrounding royalties and would review gas rates.

As well, the report said the independent regulator should deal with public complaints that could see companies pay damages to homeowners and businesses. The province has announced plans to force companies to establish a security bond to cover any damages to properties or drinking water that are a result of shale gas development.

The professor's report also calls for the creation of an energy institute that would use expertise on the shale gas industry from the province's universities, instead of relying on outside experts.

"I firmly believe that a rational, science-based process and structured dialogue is needed to properly determine whether there is a viable shale gas industry in New Brunswick, and if the economic potential can be realized in an environmentally safe manner," LaPierre said in a statement.

The recommendation to give oversight power to the energy minister comes at an interesting time for the provincial government.

Energy Minister Craig Leonard was moved back to the portfolio in Premier David Alward's latest cabinet shuffle. He was previously removed from the shale gas file because his sister was a lobbyist for the Canadian Association for Petroleum Producers.

However, Angie Leonard recently resigned from her position with the industry group and Alward said he felt any conflict of interest has been erased.

Opponents eager to respond

Members of an anti-fracking citizens group called The Alliance are anxious to review both reports and will issue a public response to them in the coming days, said spokeswoman Marilyn Lerch.

The Alward government initially would not commit to releasing the contents of a study completed by the province’s chief medical officer of health.

"So we are happy they are coming out, we are eager to read them and eager to respond to them," said Lerch.

"I can't imagine that the health officer would not highlight the dangers and the real hazards associated with shale gas mining on the health of our people," she said.

"I would anticipate that that would be heavily underlined."

In her 82-page report, Cleary said there are social and community health risks associated with the shale gas industry.

She made several recommendations, including requiring a health impact assessment and monitoring the health of the population to detect possible adverse effects.

The costs of implementing her recommendations "will not be insubstantial," but much of the cost could be absorbed by the industry, Cleary said.

Will continue to oppose

Regardless of the reports’ recommendations, however, The Alliance plans to continue to oppose shale gas mining in any form, said Lerch.

The group, which has members from 20 communities, contends the industry poses dangers to the land, the water and the health of New Brunswickers.

"We have been working to educate ourselves for two years about the hazards and educate our neighbours of shale mining in all its aspects from the very beginning until the abandonment of the mine," said Lerch.

Opponents to the shale gas industry say the hydro-fracking process can cause water and air pollution.

Hydro-fracking is a process where exploration companies inject a mixture of water, sand and chemicals into the ground, creating cracks in shale rock formations. That process allows companies to extract natural gas from areas that would otherwise go untapped.

In May, the provincial government introduced 116 proposed changes to the regulatory framework that oversees the oil and gas industry.

The new provincial regulations will set out stricter rules on protecting the environment, Natural Resources Minister Bruce Northrup has said.